Cobra Resources plc (LSE:COBR), an exploration and mining company, announces its results for the six months ended 30 June 2020.
The first half of 2020 has been a transformational period for the Company, having relisted on the LSE following the completion of the Reverse Take Over (RTO) on 16th January 2020. Since that time, the Company has successfully progressed exploration activities at its flagship Wudinna Gold Project. The highlights of the Company’s exploration activities during the period included:
· Completion of the 3-phase geochemical sampling and re-assay programme to establish key pathfinder relationships and define high priority drilling targets;
· Structural interpretation and integration of geophysical and geochemical data to establish primary controls on mineralisation;
· Application for an Ongoing PEPR to facilitate exploration programmes across all 22 orogenic gold prospects and 4 IOCG prospects. The exploration permit was subsequently approved post period end; and
· Definition of priority drill targets at Baggy Green, Baggy Green North, Clarke and Laker prospects.
As a result of the above activities, the Company is on track to complete its Stage-1 JV earn-in during the second half of 2020. This will see the Company secure a 50% interest in the Wudinna Gold Project.
Corporate and Financial Highlights
· The Company completed a RTO and was readmitted to the Main Market of the LSE on the 16th January 2020, following the successful acquisition of the now wholly owned subsidiary Lady Alice Mines in 2019.
· Since relisting, a significant improvement in the gold market enabled the Company to raise funds to support its planned exploration programmes. The Company was able to place its available headroom raising gross proceeds of approximately £677,145 in May. These funds enabled the Company to commence detailed planning for drilling activities scheduled for the second half of 2020.
· The transformation to an operational company saw changes to the Company’s Board with the resignation of Mr Rolf Gerritsen, and the appointment of Mr Daniel Mailing and Mr David Clarke as non-executive directors. Mr Greg Hancock was also appointed as non-executive Chairman.
Craig Moulton, Executive Director, commented:
The first half of 2020 has been transformational for the Company which is now well funded for a major drilling campaign during the second half of the year. The new Board members bring with them complimentary skills and experience and are focused on growing the Wudinna Gold project to its full potential.
The first six months of 2020 have been transformational for the business, having evolved from a cash shell to a sustainable operating business. Having completed the acquisiton of Lady Alice Mines Pty Ltd the Company was immediately focused on early exploration activities at the Wudinna Gold project, completing a three-stage geochemical programme:
· Stage 1 – Calibration samples to establish mineralization / pathfinder relationships
· Stage 2 – Identify possible extensions to existing mineralisation
· Stage 3 – Drill targeting / prioritisation
The results of this geochemical analyses combined with the interpretation of geological and geophysical data delivered excellent results including:
o Establishing Au-Bi-Te-W-Ag-Cu pathfinder elements as the key signature for mineralization
o Identified high mobility of gold and copper in weathering profile
o Demonstrating large scale prospectivity and continuity of geochemical anomalies, particularly in the Baggy Green, where highly anomalous pathfinders extend over 1.2km to the north
o Establishing the importance of regional structures as a control on mineralisation
o Prioritisation of initial drilling targets at Baggy Green, Baggy Green North, Clarke and Laker
During the period, the Company submitted a detailed exploration permit known as an Ongoing PEPR. This permit does not need to be renewed like normal permits which are only valid for 12 months, and commits the Company to operating at industry best levels with regards to its impact on the environment. The Ongoing PEPR cover all 22 orogenic gold prospects and 4 IOCG targets at Wudinna and will significantly reduce the time required to commence exploration programmes going forward. This permit was approved by the South Australian Government subsequent to the reporting period.
Based on the above activity the Company forecasts that it will complete Stage 1 of the Wudinna Gold Project – Farm-In and Joint Venture with Andromeda Metals Limited during the second half of 2020. The Stage 1 earn-in will see the Company secure a 50% interest in the Wudinna Gold Project.
Due to the uncertainty around the future impacts of the COVID-19 virus, global gold markets saw significant improvement.
Several potential project opportunities were reviewed by the Board during the reporting period, however, none were found to be compelling in terms of both technical merit and potential value-add to shareholders.
There were also several changes to the Company’s board during the first half of 2020. Firstly, Mr Rolf Gerritsen resigned and Mr Daniel Maling and Mr David Clarke were appointed.
Mr Maling, based in London, is a corporate finance and commercial advisor, with extensive experience in listed companies in the natural resources sector. Mr Clarke is based in Adelaide, South Australia and is an eminent Australian geologist, who has been instrumental in the discovery and development of several large mining operations. The addition of Mr Clarke and Mr Maling to the Company’s Board has provided additional depth and experience and will be a significant advantage as the Company enters a busy operational period during the second half of 2020 and business development in the years ahead.
The Company is now well established, well-funded and on the verge of commencing its first major drilling campaign.
Cobra reported an unaudited operating loss for the six months ended 30 June 2020 of £296,424 which equates to a loss per share for the period of £0.0019. This compares to a loss for the six month period to 30 June 2019 of £361,284 which equates to a loss per share for the period of £0.0054.
In May the Board made a strategic decision to place the Company’s available head room, raising gross proceeds of approximately £677,145 at a price of 2.25p. This had the advantage of minimising dilution for existing shareholders and enabled the Company to commence detailed planning for a drilling programme during the second half of 2020.
Post period end, in August 2020, the Company raised £1.5m in a placing of zero coupon convertible loan notes convertible at 2.3p, with warrants attached. This additional funding will enable the Company to develop its targeted exploration campaigns across its key projects over the next 12-18 months.
As previously announced, Cobra’s near-term focus will be on executing its planned exploration programmes, including two Reverse Circulation (RC) drilling programmes and a further Auger soil sampling programme during the second half of 2020. This will include 150 soil sample holes at Larwood, and a total 6750m RC drilling at the Greater Baggy Green area, Laker, Larwood, and Barns. Exploration activity at Barns and Larwood is on farmland, so timing is subject to the completion of harvesting activities. The Company does not currently expect any delays due to the current COVID-19 travel restrictions.
We confirm that to the best of our knowledge:
· The interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting, as adopted by the EU;
· Give a true and fair view of the assets, liabilities, financial position and loss of the Company;
· The interim report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the interim financial information, and a description of the principal risks and uncertainties for the remaining six months of the year; and
· The interim financial information includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.
Notes for Editors:
Cobra Resources plc (LSE:COBR) is an exploration and mining company whose securities are listed on the main market of London Stock Exchange plc.
The Company’s primary strategy is to focus on the development of advanced resource exploration projects with potential, through the application of disciplined and structured exploration and analysis, to progress towards a sustainable mining operation.
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